Annual Meeting Highlight: W-4: The Importance of Materiality in Franchise Disputes, Hosted by ABA
In an oft-cited decision in franchise disputes, the Eleventh Circuit in Peterbrooke Franchising of America LLC v. Miami Chocolates, LLC reversed the lower court's grant of summary judgment opining that there was an issue of fact as to whether the franchisee's refusal to install a new point-of-sale system was a material breach of the franchise agreement. The panel will have a discussion of what facts are important for a court to determine a breach of a franchise agreement is material or not and when a court might decide the issue as a matter of law. The panel will also discuss scenarios where a franchisee could argue that the franchisor terminated for a non-material breach, the franchisor's arguments otherwise, and the consequences of a franchisor terminating for a non-material breach. Finally, the panel will examine the effect of statutory prohibitions on termination even where the word materiality is absent from the statute.